Since our last rating action on May 2, 2017, we have witnessed several incrementally positive developments regarding the creditworthiness of Toronto-based Home Capital Group Inc. (HCG). These include the June 14 announcement of settlements with the Ontario Securities Commission (OSC) and with class-action plaintiffs, and the announced sale of approximately C$1.2 billion in commercial mortgage assets to KingSett Capital, a Toronto-based private equity firm. In addition, HCG's deposit balances appear to show tentative signs of stabilization. Also of importance, in our view, HCG announced an agreement with Berkshire Hathaway Inc. (AA/Stable/A-1+) for the latter to invest up to C$400 million in HCG's common equity, and provide a new C$2 billion credit facility, subject to closing conditions. We believe that these
